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Defence group BAE Systems has issued a warning that the protracted US government shutdown, the longest in history, could potentially delay contract funding and payments if it remains unresolved.

Europe's leading defence contractor stated that while the extended shutdown has not yet had any "material" effects on its US operations, there could be repercussions on contracts before the year ends.

The company said: "We are encouraged by the momentum in Congress to end the US government shutdown, especially the positive actions of this week.

"To date, we do not see material effects on our US business.

"If the shutdown persists, delays to contract funding and timing of payments before year-end are possible."

There is optimism that the US government shutdown may be nearing its end, with a spending bill finally approved by the US senate in a move that could bring closure.

However, the matter now shifts to the House of Representatives, with the lower chamber of Congress anticipated to vote on the funding measure this week.

The six-week shutdown has already inflicted significant damage on the US economy, with approximately 1.25 million federal employees missing at least one or two salary payments, thousands of flights cancelled, and government contract awards decelerated.